Alinta Energy, the local energy supplier owned by Hong Kong-based Chow Tai Fook Enterprises, would be selling its Pilbara portfolio in Western Australia, which includes the Port Hedland and Newman power stations to the gas pipelines owner.
Alinta's Pilbara assets include the 210 megawatts (MW) Port Hedland power station, the 238 MW Newman power station and the Chichester solar farm along with 200 kilometres of high voltage power transmission lines.
APA Group also plans to raise A$675 million through a fully-underwritten pro-rata institutional placement to partly fund the acquisition, coupled with an A$75 million share purchase plan.
The balance of the purchase price will be funded by new debt facilities established in connection with the acquisition.
APA shares were on a trading halt.
"For APA, this will help to expand its services in the Pilbara region, aiding its long-term growth," said Josh Gilbert, market analyst, eToro AUS Capital.
"The acquisition is expected to deliver positive immediate and long-term benefits to security holders, and complements our existing assets in Western Australia," APA CEO and Managing Director Adam Watson said.
APA is looking to expand its hold in Pilbara, while shoring up more electricity generation and assets for its long-term future.
"We had a long-term vision and plan to decarbonise Pilbara, which is well underway and underpinned by the strong renewables and emissions reductions targets of our customers and partners in the region," Alinta Energy CEO and MD Jeff Dimery said in a separate announcement.
The deal means APA now looks after some of the biggest energy-generation assets in Pilbara, a key area for mining critical commodities such as lithium, added Gilbert.